Medical markup

[wide][/wide]The cost of medical care to consumers is nothing short of outrageous. A Houston cancer center billed a patient $7 each for alcohol prep pads used for injections, while a box of 200 is $1.91 online, according to a Time report published in February. And that’s just the tip of the iceberg of bill padding and fattening from both profit-making and so-called nonprofit institutions. Hospital administrators make multi-million-dollar annual salaries, and the labs and the manufacturers of medicines, medical supplies, devices and diagnostic equipment are getting rich from the high price of health care, all at the patient’s expense.

Even people who think they have good insurance can get hit with eye-popping amounts of money owed after medical care. Staggering bills from the briefest of hospital stays are based on nickel-and-diming everything that was provided. The charges for each line item are based on a huge computer file called a chargemaster — unique to every institution. Bills that are exorbitantly inflated to make up for all kinds of payers and non-payers are presented to all patients, regardless of their insurance status.

What Medicare pays for things gives us an idea of just how high that is. A hospital might bill a patient $333 for an x-ray while Medicare only pays $23.83 for the same thing, a very sizeable difference. On another bill described in the Time report, a patient was charged $6538 for three CT scans that Medicare would have paid $825 for. On another, a CT scan with radioactive dye to the tune of $7997.54 would have been paid only $554 by Medicare.

Online prices for medical supplies are telling as well. A patient having surgery may be billed $39 for the surgeon’s gown, or $32 for the use of a reusable blanket that goes for $13 new on eBay. Medicare either won’t pay for blood and urine tests or will pay $7 to $30 for them, but patients are billed $30 to $333 for them. Medicare won’t pay for incidentals that are part of other costs, but patients are billed for them anyway. It’s common for double- and triple-billing to occur, like when saline solution and oxygen or something normally included in the daily room charge are billed separately. An ICU kit can be billed as a unit and then each tool in it billed again.

Niacin tablets that cost about five cents each in drug stores go up to $24 when they appear on a hospital bill, and a Tylenol pill is billed for $1.50 when 100 pills go for $1.49 on Amazon, and often hospitals receive them for free from the maker.

IV solutions that you can buy online for $5.16 a bag are billed to patients at $84 to $134 per. Online you can get a box of diabetes test strips for about 55 cents each that hospitals bill $18 for. A patient was billed $13,702 for a dose of Rituxan that cost the hospital about $3000 to $3500. It cost the manufacturer only $300 to make it, test it and ship it to the hospital, a manufacturer whose CEO made a salary of over $11 million in 2011.